Forgot to add that this is one of a few things that caused us to go with DB Projects in VS 2010 rather than Red-Gate SQL Source Control at this time. Of course there are a few other things related to Circular Reference (Multiple Databases that all have Synonyms that reference each other) that has even been difficult to overcome on VS. If I get some time I will try and document all the issues we have ran into and the workarounds we came up with to overcome those hurdles. I would love to use SQL Source Control instead, but it's just not quite there for our complex needs.

@bradtoast - I've added you to the list. Regarding supporting variables, it's something we're actively considering. We're thinking hard about the possibility of supporting the database project as a back end, which would mean also supporting features such as variable substitution. However, we don't have any hard dates just yet. We'll keep you informed now that you're on the list. Please feel free to ask any further questions.

Do you have any recommendations on how to deal with replicated databases in source control in the mean time?

Should we have one database that isn't replicated and bind that to source control, and have another replicated database that isn't bound to source control. Than keep the unbound db up to date using SQL Compare...